Will we still own cars in the future?

Automobile Association Philippines directors Aida S. Mendoza and David
L. Arcenas with Australian Automobile Association president Ross Heron (center)

Brian Gibbons, FIA deputy president for automobile mobility and tourism, and Jean Todt, FIA president

That was the question generated at the 22nd Auto Mobility Conference Week in Melbourne, Australia, last week organized by the FIA (Federation Internationale de l’Automobile) and hosted by the Royal Automobile Club of Victoria that was attended by 262 delegates representing 75 FIA member clubs in 72 countries, including the Automobile Association Philippines (AAP). With the theme “Membership in a Connected World,” the keynote speakers noted shifting mobility trends and changing consumer demands and expectations in the collaborative and sharing economy whereby consumers are gradually switching from physical ownership of cars to collaborative modes of on-demand access.

The sharing economy is a global movement in which people with smartphones can share a car (Zipcar, Uber, carpooling.com), as well as explore the world’s music library, rent a bike (B-cycle), book accommodations (Airbnb), “get new life for old books” (BookMooch) or even share a dog (Zilok.com) which rents out anything.

Lauren Anderson (CollaborativeConsumption.com), keynote speaker on collaborative mobility, said that people are sharing cars because of the cost savings, the convenience, parking problems and the social status of not owning a car. In Germany, she said, 75 percent of 18-24 year olds prefer their smartphones to cars.

CAR SHARING. Moreover, a car on the average sits idle 23 hours each day and costs $715 a month to run and maintain. Eighty percent of all car trips, Anderson observed, are solo rides. Zipcar (“wheels when you want them”), starting in 2000, used technology to build trust between strangers. Zipcar activated the untapped value of assets and was so successful that Avis acquired it and car manufacturers launched their own car sharing systems. Anderson predicted that global car sharing growth will eventually reach 31.2 million.

Robert L. Darbelnet, American Automobile Association CEO

Simon Rossi, development manager of Uber in Australia, said that Uber contributes more than $2.8 billion to the US economy per year and is still growing. He described Uber as a mobile app that reliably delivers a private car to you in minutes so you can ride in style, making cities more fun and safer to move around in. Rossi ticked off the benefits of the sharing economy: It reduces car ownership; decreases congestion and emissions; improves efficiency in moving people and goods that translates into less stress on infrastructure; provides employment for the underemployed/unemployed; spurs entrepreneurship and small- and medium-size business growth.

Jorg Beckmann from the Mobility Academy, Switzerland, pointed out three key trends in this area: 1) decarbonizing traditional transport systems; 2) deprivatization that sees the growth of collaborative mobility; 3) demotorization in favor of bicycles.

DIGITAL CHALLENGES. Bob Darbelnet, CEO of the American Automobile Association, also known as Triple A, acknowledged the challenges brought by competitors like car sharing (UberX service), digital mobility (Airbnb) and the traffic information app Waze. He traced a drop in his club’s membership growth since the 2008 economic downturn to a decline in the number of miles being driven by the average road user in the last nine years and a delay in drivers obtaining a first license. In turn, he attributed this to the “soft” US economy, high youth unemployment and underemployment, urban renewal, which for some obviated the need for a car, generational changes (young people approach autos and mobility differently from their parents) and the growth of new communication technologies. The age at which Americans get a driver’s license has been deferred from 80 percent, who got a license at the age of 18, down to 60 percent now. Darbelnet said that Triple A is taking steps to meet these challenges.

Eric Noble, CarLab founder and Mobility Conference keynote speaker

However, keynote speaker Eric Noble, the founder of the CarLab, one of the United States’ most influential automotive development consultancies, suggested that while the car is under threat, the danger may not be as dramatic or immediate. He said that the death of the suburbs has been exaggerated and that the number of suburban households is increasing at a greater rate than urban counterparts, with the number of cars per household correspondingly increasing. “There is no decline in the rate of driving,” Noble claimed, “It is more a decline in the rapidity of growth.” Reversing standard forecasts, he asserted that the growth of connectivity should not concern motoring clubs, adding that it is an evolution rather than a revolution.

Readers of this column should note that all the speakers at the FIA Mobility Conference Week come from First World countries with public transportation systems that are modern, efficient and clean, where peace and order prevail and motorists follow traffic regulations in general. While they can talk of car sharing, demotorization, decarbonization, the status of not owning a car and young people’s preference for smartphones rather than cars, in our Third World country, car sharing is liable to become an opportunity for car theft and other crimes. In this country, there is no such thing as demotorization since motorization is just beginning and bicycles are not a viable alternative for the daily commute. Owning a car is a status symbol, not owning one is not. Most young people would choose owning a car if given a choice between a car and a smartphone, given our decrepit public transportation system. Owning a car is still an aspiration now and in the future. No wonder car manufacturers from Japan, the United States, South Korea, Germany, France, Scandinavia, India and China are rushing in to sell their products. A collaborative, sharing economy in a connected world is far away for us, although we are trying our best to get there.